Banking StandardsLetter from the Financial Services Authority to Royal Bank of Scotland Group


We are writing to you as one of the contributors to the British Bankers’ Association (BBA) London Inter-Bank Offered Rate (LIBOR) setting process.

As you will be aware, there has been much analysis and commentary regarding LIBOR since the start of the financial crisis. This is, in part, due to LIBOR displaying volatility during this time and as a consequence becoming a widely used barometer for the health of the financial sector. More importantly, LIBOR continues to be a fundamental benchmark for interest rates globally and is widely used a basis for settlement: the integrity of LIBOR therefore remains paramount.

Given the importance of LIBOR, we wish to gain assurance that the arrangements in place for banks’ submissions are adequate. As such, we are asking each bank in the LIBOR setting process to provide an attestation as to the adequacy of the systems and controls arrangements currently in place for the determination and agreement of their LIBOR submissions. This is in the context of the definition of LIBOR and the wider guidance provided by the BBA.

We therefore request that you provide the attestation to us, as described above, for the submissions made by the Royal Bank of Scotland plc. In providing your response, it is not a requirement at this stage to provide details of any assessment or review which may have been undertaken, either as a result of this request or previously, nor any evidence which has supported senior management in reaching their view. We may, however, request this information at a later stage. Should the current arrangements not be considered wholly adequate, please provide reasons for this and what plans are in place in order to address the identified issues. We wish to receive your response by 18 March 2011.

If you have any questions regarding this letter please contact me.

Letter from the Royal Bank of Scotland Group to Financial Services Authority


I refer to your letter of 10 February 2011.

The Royal Bank of Scotland appreciates the importance of LIBOR and our responsibilities as one of the contributors to the British Bankers’ Association LIBOR setting process.

As set forth in a Draft Internal Audit Report dated March 2011, Group Internal Audit has conducted a review of the LIBOR setting process and the issues raised are being addressed to their satisfaction. Thus, on that basis I confirm that RBS has in place adequate systems and controls for the determination and submission of its LIBOR rates.

Should you have any further queries, please let us know.

February 2013

Prepared 19th June 2013